Problem 7-21 Constant-Growth Model (LO2) Here are data on two stocks, both of which have discount...
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Problem 7-21 Constant-Growth Model (LO2) Here are data on two stocks, both of which have discount rates of 20%: Return on equity Earnings per share Dividends per share Dividend payout ratios stock A 20% $ 4.50 $ 1.80 a. What is the dividend payout ratio for each firm? Note: Enter your answers as a percent rounded to 2 decimal places. Expected dividend growth rates Stock price stock B 15% $ 2.60 $ 1.80 Stock A 40.00 % b. What is the expected dividend growth rate for each stock? Note: Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Stock A Stock B 69.23 % Stock A Stock B $ 22.50 < Prev % c. What is the value of each stock? Note: Do not round Intermediate calculations. Round your answers to 2 decimal places. Stock B 7 of 12 % ww www Check my work Next Problem 7-21 Constant-Growth Model (LO2) Here are data on two stocks, both of which have discount rates of 20%: Return on equity Earnings per share Dividends per share Dividend payout ratios stock A 20% $ 4.50 $ 1.80 a. What is the dividend payout ratio for each firm? Note: Enter your answers as a percent rounded to 2 decimal places. Expected dividend growth rates Stock price stock B 15% $ 2.60 $ 1.80 Stock A 40.00 % b. What is the expected dividend growth rate for each stock? Note: Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Stock A Stock B 69.23 % Stock A Stock B $ 22.50 < Prev % c. What is the value of each stock? Note: Do not round Intermediate calculations. Round your answers to 2 decimal places. Stock B 7 of 12 % ww www Check my work Next
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Related Book For
Multinational Business Finance
ISBN: 978-0132743464
13th edition
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
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